NEW ULM — The Energy Acquisition Adjustment (EAA) will increase from just under two cents to just over two cents per kilowatt hour (kWh) starting Oct. 1.

The change came about on motion made by the New Ulm Public Utilities Commission (PUC). The EAA is an adjustment to the electric rate that is calculated to account for the

differences between the electric rates and the actual cost of purchased power and generation fuel.

The current EAA of $0.01874 per kWh is not covering the commodity purchases in 2022 and is not projected to cover commodity purchases in 2023.

Public Utilities staff recommended an increase to the EAA to $0.023 per kWh based on costs from the 2023 preliminary budget.

Financial manager Beth Kral said this adjustment is typically done in January to take effect on Feb. 1, but the adjustment was made early to help the department make up higher 2022 costs.

Part of this increase is to recover costs from the natural gas spike in Feb. 2021.

Utility Director Kris Manderfeld said in Aug. 2021 natural gas prices were at what they are now. The EAA is calculated once a year and the higher prices were not anticipated at the start of 2022. As a result, the department is seeing a lack of revenue to cover the increase.

Manderfeld said the EAA is a direct pass-through from the customer to the supplier. The money is not kept by the city.

“We would like to be proactive and recoup what we can this year and be ready for next year’s prices,” she said.

The EAA is adjusted every year. If natural gas prices come down, the PUC could lower the EAA.